File #: 11640-3(dc)
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Subject:
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Paragraph 2(b) of Part V of Schedule VI to the ETA.
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I refer to XXXXX request of October 1, 1996, concerning the meaning of the phrase "in the course of operating a ship or aircraft" for purposes of zero-rating the supply of property or services pursuant to paragraph 2(b) of Part V of Schedule VI to the ETA.
Specifically, XXXXX asks whether repair series supplied to an unregistered non-resident carrier, whose aircraft is brought into Canada solely for the purpose of obtaining major repairs, would be considered acquired "in the course of operating an aircraft" as provided for in paragraph 2(b) of Part V.
Pursuant to paragraph 2(b), a supply of property or a service made to an unregistered non-resident person, where the property or service is acquired by the person for consumption, use or supply
(b) "in the course of operating a ship or aircraft by or on behalf of a government of a country other than Canada";
If the aircraft is not "out-of-service" or otherwise not operated (whether mobile or immobile) by or on behalf of a foreign government, the repair services would be acquired for use in the course of operating the aircraft.
For purposes of paragraph 2(b), the only condition would be that the aircraft or ship must be operated by or on behalf of a foreign government at the time the property or service is acquired.
Provided this condition is met, property or services, such as maintenance and repairs, would qualify for zero-rating pursuant to paragraph 2(b).
Daniel E.B. Chamaillard
Senior Rulings Officer
Border Issues
General Operations and Border Issues Division
Rulings and Interpretations Directorate
Policy and Legislation Branch
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R. Nanner
D. Chamaillard |
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